Spotlight

Indian equity markets are likely to remain volatile and trade with a cautious bias as the lack of a credible long-term resolution to the Middle East conflict continues to cloud the investment outlook. While the agreement between Israel and Iran to halt missile strikes has helped ease immediate escalation concerns, uncertainty remains elevated amid the absence of meaningful progress in the broader U.S.–Iran diplomatic process. Against this backdrop, investors are likely to remain in a wait-and-watch mode, with risk appetite restrained by persistent geopolitical risks and the possibility of renewed volatility.    
Crude oil prices have stabilised following the easing of hostilities between Israel and Iran, offering some relief to energy markets. However, prices remain elevated, with crude trading in the $90–91 per barrel range, keeping concerns around inflation, import costs and the broader macroeconomic outlook firmly in focus.

Institutional flow trends remain another key area of focus. Foreign Institutional Investors (FIIs) have continued to maintain an aggressive selling stance, with sustained capital outflows emerging as a significant headwind for domestic equities and limiting the scope for a stronger market recovery.

Overall, investor sentiment remains cautious. While the ceasefire between Israel and Iran has helped reduce immediate geopolitical risks, the absence of meaningful progress in the broader U.S.–Iran diplomatic process, persistent FII outflows and lingering global risk aversion are likely to keep risk appetite restrained. Strong Domestic Institutional Investor (DII) participation continues to provide an important cushion for the market, but a more durable improvement in sentiment will likely require greater clarity on geopolitical developments, a sustained moderation in energy prices and a stabilisation in foreign investment flows.

Technical view

Nifty 50

Nifty 50 continues to trade with a cautious undertone as the index remains below key resistance levels, reflecting a lack of strong buying conviction at higher levels. From a technical perspective, the 23,250–23,300 zone remains an important immediate resistance area. This region represents a previous support zone that has now turned into resistance following the recent breakdown. A sustained breakout above this range would be required to improve market sentiment and could pave the way for a recovery towards the 23,450–23,550 levels.
 
On the downside, the 23,000 mark continues to serve as a critical support level. Holding above this zone will be essential to preserve the broader consolidation structure and prevent further deterioration in sentiment. However, a decisive breach below 23,000 could intensify selling pressure and expose the index to additional downside towards the 22,800–22,700 region. Momentum indicators remain subdued, indicating that bearish undertones continue to dominate the near-term trend. Overall, the technical structure remains cautious, and a sustained move above the immediate resistance zone will be necessary to revive bullish momentum and improve the broader market outlook.

Bank Nifty

Bank Nifty continues to demonstrate relative resilience despite the weakness witnessed in the broader market. However, the index remains below key resistance levels, suggesting that stronger buying participation will be required to confirm a sustained recovery. From a technical perspective, the 54,400–54,500 zone remains the immediate resistance area. A sustained move above this band could improve near-term sentiment and support a recovery towards the 54,800–55,000 region, which continues to act as a significant hurdle for the index.
 
On the downside, immediate support is placed at 54,000–53,800. Holding above this zone will be crucial to maintain the ongoing recovery structure and preserve positive undertones. However, a decisive break below this support band could trigger renewed selling pressure and drag the index towards the 53,600 level. Overall, the near-term outlook remains cautious. A sustained breakout above the 54,400–54,500 resistance zone will be required to strengthen bullish momentum and support a continuation of the recovery towards higher levels.